Syndicate Bank Versus ACIT (TDS)

2016 (2) TMI 457 - ITAT DELHI

Non deduction of tds u/s 194A by the banks including the assessee bank with respect to interest paid to NOIDA - Held that:- As decided in case of Canara Bank [2015 (8) TMI 1259 - ITAT DELHI] payment of interest by the banks to NOIDA does not require any tax withholding as the same is covered u/s 194A(3)(iii)(f). Resultantly, the order passed by the Addl CIT(TDS) u/s 201(1) and 201(1A) read with section 194A has been set aside.- Decided in favour of assessee. - Decided in favour of assessee - ITA .....

ed Addl. CIT(TDS) is patently against law, erroneous and merits to be quashed. 2. That, on the facts and circumstances of the case and in law, the learned Addl. CIT(TDS) has grossly erred in holding that the appellant was liable to deduct tax at source under the Income Tax Act, 1961 (Act) from interest payment to New Okhla Industrial Development Authority (Noida Authority), a Corporation Established under a State Act. 3. That, on the facts and circumstances of the case and in law, the learned Ad .....

eged default in deducting tax at source under section 194A of the Act on the payment of interest to Noida Authority. 2. We have heard Sri K.N.Goyal the Ld. Counsel for the assessee and M/s Nirupma Kotra, Ld. C.I.T., DR on behalf of the revenue. 3. Admittedly the issues arising in these appeals are covered by the following decisions of the coordinate bench of the Tribunal. (a) ITA No. 1359.Del.2014 to the assessment year 2006-07 in the case of Additional CIT (TDS), Ghaziabad vs. Canara Bank order .....

OIDA is not a local authority and cannot claim the benefit of exemption u/s 10(20) of the Act and hence the issue should be decided against the assessee. 5. We find that this judgment was considered by the various benches of the tribunal in their orders referred above. The tribunal in the case of Canara Bank (Supra) for the assessment year 2006-07 held as followed -: 8. It is observed that the assessee is a creation of the UP Industrial Area Development Act, 1976, a copy of which has been placed .....

f the area), industrial development authority, for any industrial development area. It is under the UP Industrial Area Development Act, 1976 that the UP Government constituted various industrial development authorities with the name of the area, such as, NOIDA Authority and Ghaziabad Authority, etc. The case of the Revenue is that only a corporation established by , inter alia, a State Act can be brought within the purview of exemption. The ld. DR argued that if the corporation is established un .....

abhakar Padhye and Ors., dated 31.3.2010, a copy of which has been placed in the paper book. The ld. AR also drew strength to fortify his point of view by relying on the same judgment for contending that the assessee is a Corporation established by the State Act. Since both the sides have heavily relied on the same judgment, it becomes significant to note its facts and ratio. 9. In that case, the appellant, a private limited company, employed respondent for more than two decades. The Respondent .....

d writ petition and directed the employer company to reinstate the Respondent. The Hon ble High Court held that the appellant, though a private limited company, was an establishment under the Act. The appellant took the matter to the Hon ble Supreme Court urging that it was not covered within the meaning of establishment and, hence, the provisions of section 47 were not applicable. The Hon ble Supreme Court held that the assessee company was not an establishment under the Act. In reaching this c .....

ablished by an Act, where the Act itself establishes the Corporation, such as, State Bank of India Act and Life Insurance Corporation of India Act. On the other hand, a Corporation is established under an Act, when it is notified by the delegated authority, though under the Act. In the light of the above distinction, it was held that a company is incorporated and registered under the Companies Act and not established under the Companies Act. 10. It is significant to note that the line of distinc .....

by the words "established", it is clear that the reference is to a corporation established, that it is brought into existence, by an Act or under an Act. In short, the term refers to a statutory corporation as contrasted from a non-statutory corporation incorporated or registered under the Companies Act. From the italicized portion of the above prescription of the judgment, it is manifest that in the context of a statutory corporation, the words by and under an Act can be read as by a .....

as been made for development of certain areas in the State into industrial and urban township. Instead of enacting area-wise Industrial Area Development Acts, the UP Government enacted a common UP Industrial Area Development Act, 1976 to cover Authorities under different areas with its distinct name. But, for the creation of various area-wise authorities such as NOIDA and Ghaziabad Authorities, there is no other purpose of the UP Industrial Area Development Act, 1976. In other words, we can also .....

ing came up for consideration before the Delhi Bench of the Tribunal in the case of Chief/Senior Manager, Oriental Bank of Commerce vs. ITO. Vide its order dated 15.7.2011 in ITA No.2228/Del/2011, the Tribunal has held that the payment of interest by Oriental Bank of Commerce to Ghaziabad Development Authority is covered within the provisions of section 194A(3)(iii)(f) and, hence, there is no obligation for deduction of tax at source. Consequently, the order passed u/s 201(1) was set aside. Simi .....